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Reuters with the report, citing a Morgan Stanley said in commentary to institutional clients on Thursday:

• Computer-driven macro
  hedge fund strategies on Wednesday sold $20 billion in equities
• set to shed at least more $25 billion over the next week
• one of the largest risk-unwinding
  events in a decade
• “The volatility of the last two weeks started out being very
  rotational,”
• “But that has now morphed
  into a broad index deleveraging (on Wednesday).”
• If volatility persists in the coming days, the sell-off
  would rapidly increase
• An additional 1% day-drop in
  global equities could spark sales of $35 billion and macro hedge
  funds could dump up to $110 billion in a 3% day fall

—

Keep your eye on JPY, the carry trade deleveraging is a huge driver. 152 now the the level to watch:

This article was written by Eamonn Sheridan at www.forexlive.com.

ANZ Roy Morgan Consumer Confidence for July 2024 in NZ. Improved to 87.9 in July:

• from June’s 83.2
• still at low levels

The ANZ-Roy Morgan consumer confidence index above 100 shows
optimism, while below that indicates pessimism.

This article was written by Eamonn Sheridan at www.forexlive.com.

BMO on the data from the US on Thursday inflation data for Q2. In brief:

• Second quarter real GDP surprised on the upside at 2.8%
• while inflation slowed during Q2 to 2.9%, it was modestly
  above expectations for a 2.7% print. As a result, investors revisited
  expectations for June’s core-PCE figures that will be released Friday
  morning, and although the consensus remains +0.2%, the assumption is
  that depending on the trajectory of revisions in April/May, there could
  be upside risks with which to contend as the market absorbs the latest
  installment of the Fed’s favored inflation measure.
• In short, growth
  remains surprisingly strong and realized inflation might be edging back
  toward the Fed’s objectives – but it doesn’t seem to be in any hurry.

Due at 0830 US Eastern time:

This article was written by Eamonn Sheridan at www.forexlive.com.

Rachel Reeves is the new UK government’s Chancellor of the Exchequer:

• Says there is still more work to do on ‘Pillar 1’ tax agreement,
  optimistic for agreement by Autumn
• Wants tax burden on
  working people to be lower, but will not make unfunded commitments
• Will make statement
  on Monday about the state of public finances, public spending
  pressures
• I want taxes to be
  lower, not higher, but won’t make commitments without being able to
  say where the money is coming from
• I am going to fix
  fiscal mess that the tories left us
• Wants fairer,
  sustainable tax on wealthy but need to strike right balance
• Labour wants to be
  pro-growth, pro-wealth creation

Stay tuned for Monday.

Later next week the Bank of England meet, on 1 August. A rate cut is expected.

This article was written by Eamonn Sheridan at www.forexlive.com.

• Decline in US Stocks Continues, Tech Giants Witness Major Losses
• Yellen says market should determine exchange rates
• NYT Sienns College Poll: Trump 48%. Harris 46% among registered voters
• US treasury auctions off $44 billion of the 7 year notes at a high yield of 4.162%
• Ex inventories, GDP Q1 is near 1.80%%. GDP Q2 adjusted is near 2.0%. Not far from trend.
• European major indices close mixed (thanks to the UK FTSE 100)
• WSJ Timiraos: Core PCE can still be up 0.18% when released on Friday, but….
• Kickstart the FX trading day for July 25 w/a technical look at the EURUSD, USDJPY & GBPUSD
• Former Fed Pres.Bullard: Fed is likely to signal they are getting ready to go in September
• US GDP Advanced for Q2 2.8% vs 2.0% estimate
• US advanced durable goods for June -6.6% versus 0.3% expected
• US initial jobless claims 235K vs. 238K expected
• The JPY is the strongest and the AUD is the weakest as the NA session begins
• ForexLive European FX news wrap: Yen gains stay the course as risk selloff continues

The USD GDP for Q2 came in stronger than expectations at 2.8%. Growth was led by consumption as he contributed 1.57%, and investment which added 1.4%. However, within the investment bucket, inventory accumulation added about 0.8% to the final 2.8% gain. So ex-inventory, GDP was closer to the 2.0% trend growth

PS the 1Q came in at 1.4% but -0.42% was inventory. If you look at ex-inventory, growth was 1.82%. So overall, 1Q was stronger than what was implied, while 2Q was weaker than the 2.8% reported (ex-inventories at least)> who

Looking at the inflation data, it was somewhat favorable. However, core PCE prices annualized were bit higher than the expectations. Specifically, they rose 2.9% versus 2.7% expected. That was still much lower than the 3.7% from Q1, which is good to know.

The core PCE – the Fed’s favored inflation gauge – will be released tomorrow at 8:30 AM ET.. Today, was a view into that number as it included a figure for June.

Mathematically, we already know other data for the year. Therefore, the higher 2.9% implies that either the June number will be higher, or there will be revisions to the prior months (in order to get to 2.9%).So we will see at 8:30 AM tomorrow. New

Other data today showed Durable goods tumbled by -6.6% but it was impacted by volatile transportation component.

The weekly initial jobless claims did dip to 235K vs 245K last week. Continuing claims were also lower than expectations which suggests joblessness is not worsening (at least for now).

So fundamentally, GDP is around 2% for the 1H of 2024. Employment is a little weaker of late, but not in a fast decline.

In the stock market today – a day after the broader indices had their worst day since the end of 2022 – the downward momentum continued in those indices.

The S&P fell -27.89 points or -0.51%. The Nasdaq index shed another -160 points or -0.93% after falling -3.6% yesterday. The good news is it could have been worse. At session lows the Nasdaq was down over -300 points. Is the Nasdaq, going to go for -10%? It is currently down around 8% from it’s recent highs.

The fall in the stock market, kept the flow of fund in the forex focused toward the CHF. It is ending the day as the strongest of the major currencies. The NZD and the AUD, remain as the weakest as they react to slower China growth (and the potential for a weakening of the US economy in 2H of 2024).

The USDJPY which ran to a new low going back to May, bounced higher (after testing a key support target)and is ending the day little changed.

The EURUSD is ending the day little changed fter a run lower failed, as did a rebound higher. Sellers are more in control in the short term going into the new trading day. See post HERE.

The USDCAD took out it’s 2024 high but only by a few pips before failing and wandering back toward key support near a break point higher from yesterday’s trading.

The AUDUSD and the NZDUSD remain under pressure (see video here for the key technical levels in play for those pairs).

This article was written by Greg Michalowski at www.forexlive.com.

Sellers continued in the US stocks at the start of the day, especially in the Nasdaq and S&P indices.

Each of them continued what was started yesterday when both had their worst trading day since the end of 2022. For the S&P it fell -36.17 points before bottoming. For the Nasdaq it tumbled -308.45 points a day after falling -655 points. That’s like close to -1000 points.

Then things turned around with the S&P moving to +64 points at the high for the day. The Nasdaq moved to up 202.05 points at session highs (a 500+ point turnaround)..

However, the gains were not meant to be and both are closing the day down on the day. The Dow and the small-cap Russell 2000 indices bounced higher as the flow of funds come out of tech and into the underperforming sector..

The final numbers for the indices are showing:

• Dow Industrial Average average plus 81.20 points or 0.20 percent at 39935.08
• S&P index fell -27.89 points or -0.81% at 5399.23
• NASDAQ index tumbled -160.69 points or -0.93% at 17181.72

The small-cap Russell 2000 rose 27.60 points or 1.26% at 2222.98.

Looking at the Magnificent 7:

• Meta Platforms -1.70%
• Amazon, -0.54%.
• Nvidia -1.72%
• Alphabet -3.10%
• Apple -0.48%
• Microsoft -2.45%
• Tesla bucked the trend and rose 1.97%

Some other big losers today included car companies (Ford GM and Stallantis) and some medical companies including Boston Scientific, Stryker, and Intuitive Surgical:

• Ford Motor (F): -18.36%
• Stellantis NV (STLA): -7.70%
• Western Digital (WDC): -7.67%
• General Motors (GM): -5.08%
• Boston Scientific (BSX): -4.50%
• AMD (AMD): -4.39%
• Stryker (SYK): -3.81%
• Intuitive Surgical (ISRG): -3.81%
• Qualcomm (QCOM): -3.16%

This article was written by Greg Michalowski at www.forexlive.com.

Treasury Secretary Janet Yellen spoke from a new conference Brazil, where she is attending a meeting with central bankers and finance ministers from Group of 20 nations.

Yellen was answering questions re Trump’s comments in a Bloomberg interview on a “big currency problem” with the dollar.

• Trump said he hears from manufacturers that “nobody wants to buy our product because it’s too expensive”
• and that other countries try to keep their currencies “weak all the time”

Yellen reiterated that the US is in agreement with Group of Seven nations backing market-set FX rates. FX interventions should only take place in situations of excess volatility, and in consultation with partners. (Thats a really ‘in a nutshell’ view, its all about extreme departure from ‘fundamentals, excess speculation and such).

More from Yellen:

• “Over the last several years, the United States has had tight monetary policy,”
• “That’s induced capital inflows that have strengthened the dollar — that’s really something to be expected”
• “We believe that’s how the system should work.”

–

On what I said about Japan above, that’s my take, maybe she was giving Suzuki the side-eye, I don’t know.

This article was written by Eamonn Sheridan at www.forexlive.com.

The Bank of Japan meet next week. Plans for reduced Japanese Government Bond buying are expected to be detailed. The question of a rate hike is an open one, but the consensus expectation is for on hold. Tokyo area inflation data is due today:

• National-level CPI data for this month will follow in about three weeks, it takes longer to gather and collate the national data.
• Tokyo CPI is a sub-index of the national CPI
• It measures the change in prices of goods and services in the Tokyo metropolitan area
• Its considered a leading indicator of national CPI trends because Tokyo is the largest city in Japan and is a major economic hub
• Historically, Tokyo CPI data has been just slightly higher than national Japan CPI data. The cost of living in Tokyo is a touch higher than in most other parts of Japan. Higher rents, for example

Stronger than expected figures should add downside pressure to the already volatile yen crosses (ie upward pressure on JPY).

• This snapshot from the ForexLive economic data calendar, access it here.
• The times in the left-most column are GMT.
• The numbers in the right-most column are the ‘prior’ (previous month/quarter as the case may be) result. The number in the column next to that, where there is a number, is the consensus median expected.

This article was written by Eamonn Sheridan at www.forexlive.com.

Good morning, afternoon and evening all. Any charts, technical analysis, trade ideas, thoughts, views, ForexLive traders would like to share and discuss with fellow ForexLive traders, please do so:.

Happy Friday everyone!

This article was written by Eamonn Sheridan at www.forexlive.com.

Southwest Airlines announced today that they will get rid of their open seating and go to an assigned seating model (like everyone else). The move is intended to sell seats at a premium.

Yay or Nay on the change?

I vote Nay, but I generally don’t care where I sit. For me, if a multi-ton flying machine can get me from Point A to Point B, and I can watch a movie or listen to music, or listen to a book while I do it, I need enough room to sit. If I get on or off first or last, it doesn’t matter much to me.

What do you think?

PS. Southwest did keep the free checked bags policy (for now at least).

This article was written by Greg Michalowski at www.forexlive.com.

Among registered voters, GOP Trump holds a 48% to 46% lead over Dem Harris.

The key here is “registered” voters. You would expect that if a registered Democrat or registered Republican, you are probably back in your own camp.

Prior to Biden stepping out of the race, GOP Trump probably had some of the registered voters switching over.

The difference will be the independent voters especially in the swing states.

The list of those swing states include:

• Wisconsin (10 electoral votes)
• Michigan (16 votes)
• Pennsylvania (20 electoral votes)
• Georgia (16 electoral votes)
• Arizona (11 votes)

And maybe

• North Carolina (it is likely Trump)

That’s it. Those 73 electoral votes will swing the election to GOP Trump or Dem Harris. If there are other states that go one way or the other, that candidate probably wins.What is better is polls from the above states.

Bookmark this page: https://www.270towin.com/2024-presidential-election-polls/

Looking at the recent polls for that state, the picture is in favor of Trump, but those seem to be against Biden. What will it look like vs Dem Harris?.

This article was written by Greg Michalowski at www.forexlive.com.